Bitcoin hits record high above $6,000

SYDNEY ( Sitnok Global) – Bitcoin reached a record high of more than $6,000 on Friday, pushing its market capitalization to $100 billion, as investors bet on an asset that has a limited supply. This may be the result of increase of crypto-currencies coming to market.

The original virtual currency has gained over 500 percent this year, more than any other tradable asset class. Bitcoin though is very volatile – posting gains and losses as high as 26 percent and 16 percent respectively on any given day.

On Friday, bitcoin hit a record peak $6,000.10 BTC=BTSP on the BitStamp platform, and was last at $5,964.24, up 4.7 percent on the day.

Limited supply is seen as the catalyst as the number of bitcoins in existence is not expected to exceed 21 million.

Analysts said it was a combination of factors that drove Friday’s surge in price.

“As China … fears fade, the price is unlocked and driven by demand and buyers entering the markets,” said Hayter.

Over the summer, China has banned the practice of raising capital through the sale of tokens to the public in what is known as initial coin offerings. It has also ordered the shutdown of digital currency exchanges.

But many in the market believe the Chinese ban is temporary.

“China would not want to be left out of the digital currency market nor the development of blockchain applications in general,” said Jason English, vice president of Protocol Marketing, at Sweetbridge, a global alliance in Zug, Switzerland that aims to use blockchain to create a liquid supply chain.

“As much as 60 percent of the world’s bitcoin mining is happening in China, and therefore, many of the large … investments in ICO projects have also been coming from crypto-currency holders in China, whether directly or indirectly,” English added.

Sean Walsh, a partner at venture capital firm Redwood City, Ventures in Redwood City, California, also believes investors have been going back into bitcoin given the still uncertain global regulatory environment on crypto-currencies.

A big part of bitcoin’s recent surge was the ICO craze, which exploded this year. Bitcoins and ether, another digital currency, are used to purchase tokens for ICOs.